THE IMPACT OF NAFTA ON FARMERS

For the past decade, the United States has had a trade agreement with Canada and Mexico that has helped shape our economy today. A lot of people are reading the word NAFTA and wonder what does this even mean? Will it affect me?  NAFTA stands for North American Free Trade Agreement and was implemented on January 1, 1994, between Mexico, Canada, and the United States. NAFTA’s purpose is to encourage economic activity between the three major economic powers of North America. Let’s break down what exactly is a part of this trade deal and why it matters. About one-fourth of all U.S imports, such as crude oil, vehicles, fresh produce, livestock and processed foods, originate from Canada and Mexico. The U.S exports about one-third of products in machinery, vehicle parts and plastics, which are destined for Canada and Mexico. See the trend of our partnerships together with these Countries?

Recently our President has had some concerns with the current trade deal of NAFTA and would like to renegotiate in May on them. With this possibility, it would change not only the current economy but also prices on products involved in this deal. We currently have had a successful trade agreement with Canada and Mexico and many are afraid this negotiation might jeopardize that. We are currently a part of the world’s largest free trade agreement, which is something other countries would like to be a part of. This has given our farmers a way to sell their products on their terms, which keeps the cost of the goods reasonable for consumers.

The current United States Economy is heavily dependent on agriculture, almost 30 percent. When we started this deal in 1994 from then to 2007 US exports grew 156 percent, which is a great thing for us. Products like corn have no tariff currently in this trade deal. An example of the use of a tariff is in cars, which is 10 percent of the levied based value on an item. Having a tariff on products such as corn can hurt domestic consumers since the lack of competition tends to push up prices. This opened a way of an increase in income for families to have a wider range of places to sell. Only so many farmers can sell to supply places such as Walmart and Aldi, this opened a market for all farmers. Thinking of the impact of NAFTA today we have seen a rise in the economic growth in all countries involved in this deal, also an increase in higher wages to people in the industries affected by this.

If you live in a state that a majority of your economy is from agriculture, it will be hurting you the most. Over 13 million jobs depend on NAFTA in the U.S currently which means this could put a lot of people out of work and would hurt many families across the U.S.

Alison Heard
Southern Illinois University

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